Manager Research

Since 2000, the current state of the investment industry is much different than the overall rewarding environment experienced by investment managers for more than 25 years. More recently, investment management firms are experiencing reduced revenue growth from lackluster markets and lower fees due to increased competition. Costs, on the other hand, have increased out of more regulatory oversight and a general loss of trust arising out of corporate and mutual fund scandals. In short, investment management firms now face a difficult set of challenges.

In our view, investment managers, once retained, should be kept on watch with any slippage in performance being a cause for review and investigation. In other words, we do not set the dial and turn our back expecting performance objectives to be delivered over the long term. While we do not propose an annual turnover of investment management, we do advocate a regular program of review to isolate potentially significant changes. In this environment, fund sponsors face many threats to investment management performance, including high growth in client retentions, the creep of bureaucracy and growth by acquisition, to single out but a few.

To maintain our efficiency and effectiveness, we long ago made the decision to invest in analytical systems and purchase comprehensive manager universe performance data. This universe information is used for peer group analysis and initial screening for the purpose of manager searches. Managers who are isolated for retention are subject to intense investigation and a significant due diligence effort.

We focus our experience and expertise on the in-depth analysis and due diligence that cannot be quantified leading to a qualitative understanding of both risks and returns on asset classes, investment processes and investment managers. Our practice is to have all consultants involved in asset class and manager research which ensures that the best ideas are generated from the team. Asset class and manager research are the cornerstone of our business.